I'm starting my VA business with a partner and we're doing up a partnership agreement and contract. Has anyone else done that? What would you include in it?

I've done many of them in the corp. world. Your best bet will be to find a template to use, I wouldn't attempt it on my own. Here are some good places to check. www.lectlaw.com, www.nolo.com,

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Rebecka Melson ~ Virtual Business Services

Since my husband and I are business partners we hadn't even considered writing up a formal agreement...I'm sure the legal/logical thing to do would be to have something in place JUST IN CASE...but it feels kind of unnecessary to me - after all, he's my best friend - even the slightest implication of mistrust is crazy.

Anyone have any thoughts on if this is something we should be doing - are there any reasons it would be necessary as a form of protection for the company itself, rather than us as individuals?

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All parternships should have a partnership agreement, it is a seperate entity even though you and your husband are the partners. It is proof to the IRS and creditors that you are conducting the parternship as a legitimate business. Also, it will protect you both if you ever got a divorce, added a partner, etc.

Even as a single-member LLC you should have an operating arrangement (also called an operating agreement) in place, which I do. It seems unecessary at the moment, but if I tried to apply for a business loan it would be required by the bank as well as most creditors. Also, it has stipulations in place for if I ever did decide to add a partner in the future.

P.S. Tess, if you'll send me instructions on how to add it to the documents section I'd be happy to share my Operating Arrangement.

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Rebecka Melson ~ Virtual Business Services

I agree, always have an agreement. Not only for legal purposes but they can go a step further to define the "final say" or to outline roles. This would be a good time to also do a document for each partner outlining their responsibilities, title and duties. Also discuss what to do in the growing years.

A great book that I have read is, E- Myth, I loved it. http://www.amazon.com/E-Myth-Revisit.../dp/0694515302

Lisa

Thanks so much to both of you for following up to answer my question - I'll add this agreement to my immediate to-do list (and Rebecka, I've sent you a PM and truly appreciate your generous contribution to the document library!)

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We have been working with a template that I got from http://www.docstoc.com it's a great source for all sorts of templates! I wouldn't have had a clue where to begin if I tried it on my own! My partner is actually my cousin and it's not a matter of mistrust with us. I think it's important to have this partnership agreement because we both have ideas going into this business and we want to make sure we're on the same page where finances and expenses are concerned. I'm sure everyone can agree that things can get tricky when money is involved and I think more or less it's to protect our relationship so there's no confusion later down the road. We're getting all that over with now to strengthen our business relationship in order for our business to succeed.
Thanks for the replies!

The "LLC Company Agreement" looks like a good one, it's basically your standard LLC/Partnership Agreement. You could add any changes directly to the agreement or your could do an "Addendum". I didn't read the whole thing, but most parternships assign a "Managing Member" to make the decisions for the company. You can have more than one Managing Member, so you both could be Managers and have dual decision making power. The Operating Agreement should state what duties that a Manager can implement on their own and what they need consent of the other members for. For Instance, a manager can set up the checking account but she can't take out a loan in the company name or apply for credit in the company name, or make a purchase over $xx.xx without consent of the members or if in the case of dual managers, both managers must sign.

The tricky part is if you are both 50/50 partners and you disagree on something who is the deciding party? You will both need to agree on an un-biased 3rd party who will be the deciding party.

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Rebecka Melson ~ Virtual Business Services

That's a good point Rebecka. So far we've agreed on everything we've done, our biggest challenge is the website where our tastes differ a bit... But we have someone who does design work from home and he's the one we've been turning to for help in logo design and website design, he's been a huge help! I think you're right though, it may be a good idea to put in the agreement how we will make final decisions if we disagree on something. Thanks for the input!